How To Be Kind To Your Finances

When we think of money management, it calls to mind budgets and spread sheets and all sorts of boring things. But when you mention management in the real world, the image calls to mind human resources professionals and working to create a positive work environment. So whether you sit down solo or as a partnership to manage your finances, draw from the following list to make sure you are doing what you can do to create a positive money environment:

Set a time to talk about money

For some people, talking about money at night can be incredibly stressful. Others might prefer only to talk at night. The time of day, the time of week, and the clothes you wear can all affect how comfortable and relaxed you and your partner feel when you discuss money. To make sure you are as effective as possible, meet during the time of the week and time of the day that is agreeable to everyone involved.

Agree to certain words

If you know your partner gets territorial around the word “budget,” use the word “spending plan.” If you hate spreadsheets, write out your plan in fun colored markers on index cards. There is no required language when it comes to managing your finances — whatever it takes to get the job done is fine.

Agree to work together

Talking about money isn’t about making anyone feel bad, it’s about deciding what the best purpose for every dollar your household earns. And money mistakes are just that — mistakes that can be corrected the next time you give it a try. If you are budgeting with a partner or spouse, it is important to vocalize that you are both coming together for a common purpose, not calling into question each others decisions. And if you are budgeting solo, the same rules apply. Be kind to yourself, because you are on your own team!

Give meaning to your meetings

Few things are as rewarding as spending time working towards a goal and seeing progress. But when you invest time in a goal and nothing happens? Crushing. When you work to set a budget, do your best to stick to the plan so that the time you have invested in your plan has purpose.

What do you do to create a positive money environment?

Make the Most Out of Your Payday

This entry was posted in Bills & Income and tagged , , , by sjgreesonbach.

Pay day is an exciting day no matter how you slice it. But even more exciting is saving a healthy chunk of your pay check for yourself. Your wants, your needs, and those little unexpected events that pop up.

The good news is that your can make the most out of your payday by paying yourself strategically. Whether your financial challenge is over-spending, hating spreadsheets, or you just can’t stand the details, read on for a few tips to tweak your income so that you can maximize your pay day.

Budget fix for the over-spender

For the over-spender who needs a little control in his life, scheduled self-payments can help you distance yourself from your own money. Look at your month’s expenses and schedule the payments for things like groceries, gas, food, and spending money. Use envelopes or a calendar system to “pay yourself” when it comes time to make that purchase, but otherwise limit your contact with your income. Bank your savings as you go, or see how much you can gather by the end of the month.

Budget fix for the spreadsheet-averse

Spreadsheets can be very intimidating, even when it is to track something as interesting as your own money. If you prefer simple math or lists, combining your monthly income into a bulk payment might be for you. “Pay yourself” at the beginning of the month in one chunk payment, then pay your bills and expenses by keeping a single list of subtractions as you pull from that sum.

Budget fix for those who can’t be hassled with the details

If you feel like your time is wasted when you spend it on budgeting, laissez-faire budgeting could be for you. First, assess your budget needs including utilities, rent, and spending and make sure the total amount is covered by the sum in your account. Then, set an account cushion of a few hundred dollars and stop watching. Check in every month to make sure you haven’t been incorrectly billed or missed a payment, but otherwise invest your saved time into other pursuits.

What style do you use to manage your money?

Teaching Personal Finance to Children

This entry was posted in Education and tagged , , by sjgreesonbach.

The best way to make personal finance real for children is to make personal finance real.

Sound strange? Consider this: we all know that the only way to gain experience is to experience the thing for yourself. Therefore, the best way to teach children about personal finance is to give them money in a controlled environment and help them learn how to use and save it properly.

Personal finance for children in a classroom
Using actual money may not be appropriate for a classroom. Instead, create your own form of currency in the way of a points system, using time, coupons or bonuses. All children value something: maybe in your classroom that would look like more silent reading time, more time on the classroom computer, or perhaps points that can be stored up and used to “purchase” classroom items such as pencils, erasers, or homework passes.

Create a classroom system or budget around students earning points by completing homework or scoring a certain score on a test or quiz. You could also add to that list performing basic tasks around the room, such as cleaning the board or helping the teacher in some way. Create lessons around tracking, “spending” and “saving” those points to teach the core principles of personal finance: earning, spending, and saving one’s resources.

Personal finance for children at home
Even if money is tight at home, you can still use small amounts of money to teach children how to earn money, save money, and spend money wisely. Besides the usual chores that a child does to help pitch in around the house, consider putting up a “hiring board” that features above-and-beyond chores that a child can do to earn twenty-five cents, fifty cents, or a dollar. This is money that a child would earn upon completing the chore satisfactorily and money that would be his to do with as he likes (within the rules of the home, of course!).

When a child can pick and choose when to work and when to not work, the connection between working and money deepens and lays an excellent foundation for later in life.

More resources for teaching personal finance to children can be found on websites such as the National Financial Educators Council website and the Jump$tart.Org website.

What tips and tricks have you used to teach children about personal finance?

When to Start Your Own Business

Over the course of a lifetime, many people have one or two great ideas. But the distance between a great idea and a great business is a very large one. So, how do you know when your idea is just a good idea, and when your idea is your next entrepreneurial business? Here are five questions to ask yourself before taking the plunge:

Do other people think it is a good idea? Start talking up your idea. Do people stop what they’re doing and seem interested? Is this meeting a need that a number of people have? While a better gauge would be a full market survey, you can get a decent idea of your brainstorming efforts by pitching it to the people around you.

Would other people pay money for this item? More importantly, is your idea something that people would pay money for.? Or, is it something interesting enough to draw enough attention that advertisers would get behind it? Even if something is a good idea, the unfortunate truth is that to start your own business you need to be able to profit from it. Make sure there is a need and a want for your product before you take that leap.

Do you have 8-12 months of savings and a reasonable level of financial security? In the best case scenario, your idea will get attention and start to make sales. But even if you meet your sales goals, that’s no guarantee that you will turn a profit because of your initial investment! Make sure that you have eight to twelve months of savings and a general feeling of financial security (for example, perhaps a spouse who works full time or a fully-funded retirement account) before you risk your future on starting your own business.

Do you have good credit? While it is commendable to begin a business without the help of a bank loan, most entrepreneurs need seed funding, or alternative funding, to start their business. So, you need to make sure that your credit score is good enough to warrant a bank’s trust. This means a long history of paying your bills on time and managing your credit wisely.

Do you need a lot of sleep? This question is a little tongue-in-cheek, but it is a fact that entrepreneurs and risk-takers end up working overtime on their companies. Sometimes  that means performing so many roles in a given day that you end up with a schedule more like twelve hours per day than the standard eight hours per day. Be sure that you are willing to make the sacrifice of time to get your business off the ground. Because nothing is worse than working late nights and early mornings on something that you are not passionate about!

Are you ready to start your own business? Share your story below!

Using Classroom Discussion to Teach Personal Finance in Middle School

This entry was posted in Education and tagged , by sjgreesonbach.

When it comes to talking about money, students can come from a variety of different backgrounds. One student might have parents who are very open about earnings and budgeting, while another student has never seen a balanced checkbook.

Despite being a very important subject, it is often the case that middle school students have not received a lot of personal finance instruction at home beyond “study hard so you can get a job”!

One of the best services you can provide for your students is to show them how to talk about money productively and politely to give them the tools to have discussions without making others uncomfortable. Here are a few tips for helping students talk about money in middle school:

Ask about habits, not about numbers
Most people shy away from talking about money because real numbers can create uncomfortable situations, especially when money is tight. Think of it this way: do you really want your child to know your annual income, and then to discuss that with other students?

Emphasize with students that instead of asking “How much do you make,” it is better to ask questions like, “What do you think is important to spend money on?”

By focusing on money habits and the “why” behind one’s spending, you can encourage a rich discussion instead of a superficial (and possibly uncomfortable) talk about wealth.

Focus on the Future
Another important discussion tactic is to talk about the future rather than the present or the past. Instead of looking at mistakes or current struggles, ask questions about the best way to use money in the future, like planning to buy a car, a house, or to pay for college.

Having a real, physical goal (instead of reflecting on a bad purchase or a financial dry spell) means the discussion will be positive and hopeful.

Use personal writing to encourage quiet students
In the case of a shy learner, personal writing can be a huge boon for many students. Here are a few writing prompts that could encourage a middle school student to engage in a personal finance discussion:

  • If you found $5 in your pocket, what would you do with it?
  • If you wanted to save $100, how would you do it?
  • What do you think is the most confusing thing about money? What do you think makes the most sense about money?

For more ideas, check out the Practical Money Skills website, which offers free personal finance curriculum for teens and highlights ways to use discussion and personal writing to learn personal finance. And don’t forget the useful applications of the BudgetTracker program in the classroom, like using discussion boards and creative prompts to keep the conversation flowing!

Do you have any tips for getting kids talking in the classroom?

4 Tips for Teaching Personal Finance in High School

This entry was posted in Education and tagged , by sjgreesonbach.

The #1 rule of effective secondary education teaching is to make the learning real to the student. Use these four tips to find common ground with high school students and make the topic of personal finance really hit home:

Use technology to make personal finance interactive
Combining the social aspect of an online environment with the typically boring topic of money will help students find their own way to relate with the subject.

Use the professional videos on a website like SaveandInvest.Org to help students learn the basics, then use an online resource like BudgetTracker to create a customizable budget and share it with their classmates. Users can also access message boards for more budgeting tips and news stories related to personal finance!

Appeal to different learning styles
Personal finance is personal! While there are sensible rules to use when managing your money, it is also important to understand that students will each relate to money in a different way depending on their personal learning style.

While for some students walking through a hard-and-fast budget spreadsheet would be a good choice, other students may be more creative and need to use the BudgetTracker pie chart, or to illustrate finances in a visual journal. By providing 3-5 viable scenarios for students who might need other options, you can feel confident each student will see personal finance as a truly personal topic.

Give real-life examples based on your location
Nothing makes personal finance more real than looking at how you would spend your own money. Ask students to use an online payscale tool to research the average income of one or two jobs and make a real life budget. Include fixed expenses like state and federal taxes (if applicable), rent for your area, utilities, car payment, etc.

When considering other line items in the budget, be sure to calculate the original cost and final cost of purchasing items with an interest rate. Also calculate popular high school expenses, such as how much it costs to purchase a soda each day, to go to the movies each weekend, or to purchase new jeans, shirts, and coats.

Allow for alternative education choices
While you may have many students on a college-track, it is also important to acknowledge that some students will not need to go to college to be successful, or they have already made alternative plans. Be sure to address the needs of alternative-education students by discussing important financial priorities like retirement, saving for emergencies, and preparing for the finances of starting a family..

How do you plan to make personal finance real for your students?

Tax Ramifications of Starting Your Own Small Business

This entry was posted in General and tagged , , , , by Mark P. Cussen, CFP, CMFC.

Many entrepreneurs have a great idea, product or service that they believe is marketable to the public, but they are clueless about the tax implications of running their own business. Knowing how your business will be taxed can save you a great deal of time and money and help to simplify your life. There are four main types of business entities, each of which is taxed in a different manner: Continue reading

Why Do I Need Life Insurance? And What Type Should I Buy?

This entry was posted in General by Mark P. Cussen, CFP, CMFC.

Life insurance has provided financial security for millions of people and businesses around the world for centuries. This versatile tool can enable policy owners and beneficiaries to accomplish a multitude of objectives, including:

  • Income Replacement – One of the primary purposes of life insurance is for the replacement of lost income due to the death of the breadwinner in a family. This is especially critical for families with small children that would otherwise be left destitute without this protection. Continue reading